Over the course of the past decade, advances in technology and growing respect and acceptance for the powers of computers have created a true explosion in the computer industry. Quite naturally, the growth of computer availability and application has spawned a host of new legal issues. This case requires the court to wrestle with some of these novel legal issues which are a product of the marriage between law and computers.

The indictment charges that defendants Robert J. Riggs and Craig Neidorf, through the use of computers, violated the federal wire fraud statute, 18 U.S.C. § 1343, and the federal statute prohibiting interstate transportation of stolen property, 18 U.S.C. § 2314. Neidorf argues that the wire fraud statute and the statute prohibiting interstate transportation of stolen property do not apply to the conduct with which he is charged. Therefore, he has moved to dismiss the charges against him, as set forth in Counts II-IV of the indictment, which are based on those statutes.
*fn1"
Neidorf has also filed various other pretrial motions. For the reasons stated herein, Neidorf's motions are denied.

In about December 1988, Riggs began the execution of the fraud scheme by using his home computer in Decatur, Georgia, to gain unlawful access to Bell South's computer system located at its corporate headquarters in Atlanta, Georgia. After gaining access to Bell South's system, Riggs "downloaded"
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the text file, which described in detail the operation of the E911 system in Bell South's operating region. Riggs then disguised and concealed his unauthorized access to the Bell South system by using account codes of persons with legitimate access to the E911 text file.

Pursuant to the scheme he had devised with Neidorf, Riggs then transferred the stolen computer text file to Neidorf by way of an interstate computer data network. Riggs stored the stolen text file on a computer bulletin board system
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located in Lockport, Illinois, so as to make the file available to Neidorf. The Lockport bulletin board system was used by computer "hackers"
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as a location for exchanging and developing software tools and other information which could be used for unauthorized intrusion into computer systems. Neidorf, a twenty-year-old student at the University of Missouri in Columbia, Missouri, used a computer located at his school to access the Lockport computer bulletin board and thereby receive the Bell South E911 text file from Riggs. At the request of Riggs, Neidorf then edited and retyped the E911 text file in order to conceal the fact that it had been stolen from Bell South. Neidorf then "uploaded"
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his revised version of the stolen file back onto the Lockport bulletin board system for Riggs' review. To complete the scheme, in February 1989, Neidorf published his edited edition of Bell South's E911 text file in his PHRACK newsletter.

Neidorf claims that Count II of the indictment is defective because it fails to allege a scheme to defraud, one of the necessary elements for a wire fraud claim under 18 U.S.C. § 1343. See Lombardo v. United States, 865 F.2d 155, 157 (7th Cir.) (holding that the two elements of a wire fraud claim under § 1343 are a scheme to defraud and the use of wire communications in furtherance of the scheme), cert. denied, 491 U.S. 905, 105 L. Ed. 2d 695, 109 S. Ct. 3186 (1989). All Count II charges, says Neidorf, is that he received and then transferred a computer text file, not that he participated in any scheme to defraud.

Unsurprisingly, Neidorf's reading of the indictment is self-servingly narrow. The indictment plainly and clearly charges that Neidorf and Riggs concocted a fraud scheme, the object of which was to steal the E911 text file from Bell South and to distribute it to others via the PHRACK newsletter. The indictment also clearly alleges that both Riggs and Neidorf took action in furtherance of the fraud scheme. Riggs allegedly used fraudulent means to access Bell South's computer system and then disguised his unauthorized entry. Neidorf allegedly furthered the scheme by redacting from the E911 text file references to Bell South and other information which would reveal the source of the E911 file, transmitting the redacted file back to the Lockport bulletin board for Riggs review, and publishing the redacted text file in the PHRACK newsletter for others' use. Moreover, both Neidorf and Riggs allegedly used coded language, code names, and other deceptive means to avoid the detection of their fraud by law enforcement officials. These allegations sufficiently set forth the existence of a scheme to defraud, as well as Neidorf's participation in the scheme. See McNally v. United States, 483 U.S. 350, 358, 97 L. Ed. 2d 292, 107 S. Ct. 2875 (1987) (where the Court, quoting Hammerschmidt v. United States, 265 U.S. 182, 188, 68 L. Ed. 968, 44 S. Ct. 511 (1924), held that "to defraud" as used in the mail fraud statute simply means "wronging one in his property rights by dishonest methods or schemes" usually by "the deprivation of something of value by trick, deceit, chicane, or overreaching"); see also Carpenter v. United States, 484 U.S. 19, 108 S. Ct. 316, 320-21, 98 L. Ed. 2d 275 (1987) (applying McNally to the wire fraud statute, the Court held that a Wall Street Journal columnist participated in a scheme to defraud chargeable under § 1343 where he executed a plan under which he disclosed confidential financial information to an investor in exchange for a share of the investor's profits from that information).

Neidorf also argues that Count II is deficient because it fails to allege that he had a fiduciary relationship with Bell South. To support this position, Neidorf relies on cases such as United States v. Richter, 610 F. Supp. 480 (N.D. Ill. 1985), and United States v. Dorfman, 532 F. Supp. 1118 (N.D. Ill. 1981). In each of those cases, as well as other similar cases cited by Neidorf, the court held that where a wire fraud charge is based on the deprivation of an intangible right, such as the right to honest and fair government or the right to the loyal service of an employee, the government must allege the existence of a fiduciary relationship between the defendant and the alleged victim to state a charge under § 1343.

As further support for his argument that fiduciary relationship between himself and Bell South must be alleged to state a wire fraud charge against him, Neidorf analogizes his role in the alleged scheme to that of an "innocent tippee" in the securities context, such as the defendants in Dirks v. Securities Exchange Commission, 463 U.S. 646, 77 L. Ed. 2d 911, 103 S. Ct. 3255 (1983), and Chiarella v. United States, 445 U.S. 222, 63 L. Ed. 2d 348, 100 S. Ct. 1108 (1980). This analogy, however, is fallacious. Those cases involved individuals who come upon information lawfully ; the question in each of those cases was whether, once possessing that information, the individual had a duty to disclose it. In the instant case, in contrast, Neidorf is alleged to have planned and participated in the scheme to defraud Bell South. Although Riggs allegedly was the one who actually stole the E911 text file from Bell South's computer system, the government alleges that Neidorf was completely aware of Riggs' activities and agreed to help Riggs conceal the theft to make the fraud complete. Therefore, in no way can Neidorf be construed as being in a similar situation to the innocent tippees in Dirks and Chiarella.8 As a result, the court rejects his argument that Count II is defective for failing to allege a fiduciary duty between himself and Bell South. Neidorf's motion to dismiss Count II is accordingly denied.

Whoever transports, transmits, or transfers in interstate or foreign commerce any goods, wares, merchandise, securities or money, of the value of $ 5000 or more, knowing the same to have been stolen, converted or taken by fraud . . . shall be fined not more than $ 10,000 or imprisoned not more than ten years, or both.

&nbsp;The government concedes that charging Neidorf under § 2314 plots a course on uncharted waters. No court has ever held that the electronic transfer of confidential, proprietary business information from one computer to another across state lines constitutes a violation of § 2314. However, no court has addressed the issue. Surprisingly, despite the prevalence of computer-related crime, this is a case of first impression. The government argues that reading § 2314 as covering Neidorf's conduct in this case is a natural adaptation of the statute to modern society. Conversely, Neidorf contends that his conduct does not fall within ...

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